A blog about recruiting, talent management, and trends
Employee Referrals: The 8 Most Important Studies
We have yet to meet one person who doesn’t agree that employee referrals are the best source of hires (and we meet a lot of opinionated people), but as big believers in data driven decisions, we wanted to share and summarize the multiple research studies from top universities and market research agencies supporting everyone’s intuition.
Notable learnings to understand the state of employee referrals:
- Employee referrals are the number one source of hire by volume (CareerXroads)
- Employee referrals “provide a steady stream of high caliber candidates who are often those hard to find, ‘passive’ job seekers” (SHRM)
- “Referred workers are substantially less likely to quit” (HaaS Berkeley)
- “Employees hired through personal referrals have higher productivity, lower turnover, and lower screening costs” (Stanford)
- 88% of employers say employee referrals are the #1 source of ‘above average candidates’ (Dr. John Sullivan)
- Referred candidates are 40% more likely to be hired (The Federal Reserve)
- On average, it takes just 10.4 referrals to lead to a hire (Oracle)
- Referrals lower monitoring costs because high-effort referees can exert peer pressure on co-workers, allowing firms to pay lower efficiency wages (Universitat Pompeu Fabra)
Click on any of the studies to read the full in-depth PDF on the future of employee referrals.